updated 05:30 am EDT, Sun April 1, 2012
Panasonic shifts smartphone production offshore
In a sign of the times for the struggling Japanese tech giants, Panasonic is said to be offshoring all of its cellphone manufacturing. According to the Nikkei, the shift in production (sub. req.) could happen as soon as this summer, as the company looks to re-enter international markets over the coming fiscal year. Panasonic is aiming to get a competitive edge on manufacturing costs by having its cellphones made in China and Malaysia as currently half of its output is still produced domestically.
For the financial year ending this Sunday, Panasonic is expected to book its worst ever loss of around $9.7 billion. Like Sony, the company is bleeding sales in its TV business, which is struggling to turn a profit in the face of stiff competition from Korea and Taiwan. Despite leading the loss-making TV division, Panasonic has appointed Kazuhiro Tsuga (55) as president to help engineer its company-wide turnaround.
However, it believes that there is greater profit margin in smartthones, and completely outsourcing their production will enable it to capitalize on this. It is established as the third largest smartphone maker in Japan and is hoping to triple its sales from 5 million units to 15 million by 2016. Re-entering international markets, after withdrawing from them in 2005, is critical to reaching those figures.
One of the first handsets expected lead the charge in Japan and Europe is the forthcoming Eluga. It is just 0.3-inches thin that is both completely waterproof and dustproof within certain tolerances. It centers on a 4.3-inch 540x960 AMOLED display and is powered by a dual-core 1GHz TI OMAP processor. However, a more powerful, but slightly thicker version powered by a Snapdragon S4 with a 720p display is set to follow soon after.